Blue Ocean Strategy

Objectives Explain Who developed the Blue Ocean Strategy Explain What is a Business Universe Differentiate between Blue Ocean and Red Ocean Describe the Importance of Blue Ocean Markets Explain Key Terms Related to Blue Ocean Strategy Describe Ways to Create Blue Oceans Explain Steps to Create a Blue Ocean Strategy List the Blue Ocean Strategy Tools Explain What is Meant by Value Innovation Explain What is Tipping Point Leadership Explain What is the ERRC Grid Explain the Use of the Buyer Utility Map Explain Steps for Strategy Reorientation & Execution Describe How to Choose Right Strategic Approach List the Core Values to Drive Innovation

Flynn is not sure what kind of business he should start. Introduction Flynn is not sure what kind of business he should start. He knows that if he tries to venture into the field of electronics and consumer goods, his business would face a lot of tough competition from the existing players in the field.

Introduction The market space of electronics and consumer goods is so crowded that in order for his business to succeed, Flynn would have to beat the existing competition and also exploit the existing demand.

Introduction Flynn’s ex-boss and a long time friend, Mark Yardley comes to Flynn’s rescue. Mark tells Flynn that in order to start a successful business venture, it is crucial that Flynn’s business should create a unique and uncontested market space just for itself.

Introduction In such a market space which is free from competition, Flynn can be sure that his business can easily and to a greater extent surely succeed. Mark tells Flynn to carefully study and implement the ‘Blue Ocean Strategy’ for his business.

Introduction Mark tells Flynn that in order to implement the ‘Blue Ocean Strategy’ he would have to come up with a business idea that will create a new uncontested market space for his business.

Introduction Hence, you can understand that in order to succeed in any business, an organization and its management should always try to adopt a strategy such as the ‘Blue Ocean Strategy’ to rid itself of the tough competition and create a new free market space for itself. Let us learn about the ‘Blue Ocean Strategy’ in detail.

Who developed the concept of Blue Ocean Strategy? W. Chan Kim and Renee Mauborgne developed the “Blue Ocean Strategy” concept. This concept was first presented in their book titled “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant.”

Blue Ocean Strategy versus Red Ocean Strategy Let us know look at some of the differences between the blue ocean strategy versus the red ocean strategy. It involves competing in an existing market space In this concept, a market space is created which is free from any competition. Competition is irrelevant here and it has no effect on the success of a business. It involves beating the competition

Importance of Blue Ocean Markets In red ocean market space, the competition is very severe and cut throat. Hence “Blue Oceans” are important and it is a shot way to success. When the competition is heavy, the companies have to reduce their price to beat others. It leads to reduction in profits and growth.

Steps to Create a Blue Ocean Strategy The following are the four steps that you need to follow to create a ‘Blue Ocean Strategy: Step 1: Create Uncontested Market Space Step 2: Focus on the Big Picture Step 3: Reach Beyond Existing Demand Step 4: Focus on Getting the Strategic Sequence Right Let us look at each in detail.

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